Elizabeth Kolbert The Psychology of Inequality Elizabeth Kolbert is a staff writer

The Psychology of Inequality

Elizabeth Kolbert is a staff writer for the New Yorker. Her books include The Prophet of Love: And Other Tales of Power and Deceit, Field Notes from a Catastrophe, and The Sixth Extinction, which won the 2015 Pulitzer Prize for general nonfiction. She is the editor of The Best American Science and Nature Writing 2009.

AS YOU READ: How does inequality, in terms of income, affect our perceptions of ourselves?

In 2016, the highest-paid employee of the State of California was Jim Mora, the head coach of U.C.L.A.’s football team. (He has since been fired.) That year, Mora pulled in $3.58 million. Coming in second, with a salary of $2.93 million, was Cuonzo Martin, at the time the head coach of the men’s basketball team at the University of California, Berkeley. Victor Khalil, the chief dentist at the Department of State Hospitals, made six hundred and eighty-six thousand dollars; Anne Neville, the director of the California Research Bureau, earned a hundred and thirty-five thousand dollars; and John Smith, a seasonal clerk at the Franchise Tax Board, earned twelve thousand nine hundred dollars.

I learned all this from a database maintained by the Sacramento Bee. The database, which is open to the public, is searchable by name and by department, and contains precise salary information for the more than three hundred thousand people who work for California. Today, most state employees probably know about the database. But that wasn’t the case when it was first created, in 2008. This made possible an experiment.

The experiment, conducted by four economists, was designed to test rival theories of inequity. According to one theory, the so-called rational-updating model, people assess ° their salaries in terms of opportunities. If they discover that they are being paid less than their co-workers, they will “update” their projections about future earnings and conclude that their prospects of a raise are good. Conversely ,° people who learn that they earn more than their co-workers will be discouraged by that news. They’ll update their expectations in the opposite direction.

assess:

Estimate the value of.

conversely:

In an opposite way.

According to a rival theory, people respond to inequity not rationally but emotionally. If they discover that they’re being paid less than their colleagues, they won’t see this as a signal to expect a raise but as evidence that they are underappreciated. (The researchers refer to this as the “relative income” model.) By this theory, people who learn that their salaries are at the low end will be pissed. Those who discover that they’re at the high end will be gratified.

The economists conducting the study sent an email to thousands of employees at three University of California schools — Santa Cruz, San Diego, and Los Angeles — alerting them to the existence of the Bee’s database. This nudge produced a spike in visits to the Web site as workers, in effect, peeked at one another’s paychecks.

A few days later, the researchers sent a follow-up email, this one with questions. “How satisfied are you with your job?” it asked. “How satisfied are you with your wage/salary on this job?” They also sent the survey to workers who hadn’t been nudged toward the database. Then they compared the results. What they found didn’t conform to either theory, exactly.

As the relative-income model predicted, those who’d learned that they were earning less than their peers were ticked off. Compared with the control group, they reported being less satisfied with their jobs and more interested in finding new ones. But the relative-income model broke down when it came to those at the top. Workers who discovered that they were doing better than their colleagues evinced ° no pleasure. They were merely indifferent. As the economists put it in a paper that they eventually wrote about the study, access to the database had a “negative effect on workers paid below the median for their unit and occupation” but “no effect on workers paid above median.”

evinced:

Proved.

The message the economists took from their research was that employers “have a strong incentive” to keep salaries secret. Assuming that California workers are representative of the broader population, the experiment also suggests a larger, more disturbing conclusion. In a society where economic gains are concentrated at the top — a society, in other words, like our own — there are no real winners and a multitude of losers.

Keith Payne, a psychologist, remembers the exact moment when he learned he was poor. He was in fourth grade, standing in line in the cafeteria of his elementary school, in western Kentucky. Payne didn’t pay for meals — his family’s income was low enough that he qualified for free school lunch — and normally the cashier just waved him through. But on this particular day there was someone new at the register, and she asked Payne for a dollar twenty-five, which he didn’t have. He was mortified .° Suddenly, he realized that he was different from the other kids, who were walking around with cash in their pockets.

mortified:

Humiliated.

“That moment changed everything for me,” Payne writes, in “The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die.” Although in strictly economic terms nothing had happened — Payne’s family had just as much (or as little) money as it had the day before — that afternoon in the cafeteria he became aware of which rung on the ladder he occupied. He grew embarrassed about his clothes, his way of talking, even his hair, which was cut at home with a bowl. “Always a shy kid, I became almost completely silent at school,” he recalls.

Payne is now a professor at the University of North Carolina, Chapel Hill. He has come to believe that what’s really damaging about being poor, at least in a country like the United States — where, as he notes, even most people living below the poverty line possess TVs, microwaves, and cell phones — is the subjective experience of feeling poor. This feeling is not limited to those in the bottom quintile; in a world where people measure themselves against their neighbors, it’s possible to earn good money and still feel deprived. “Unlike the rigid columns of numbers that make up a bank ledger, status is always a moving target, because it is defined by ongoing comparisons to others,” Payne writes.

Feeling poor, meanwhile, has consequences that go well beyond feeling. People who see themselves as poor make different decisions, and, generally, worse ones. Consider gambling. Spending two bucks on a Powerball ticket, which has roughly a one-in-three-hundred-million chance of paying out, is never a good bet. It’s especially ill-advised for those struggling to make ends meet. Yet low-income Americans buy a disproportionate share of lottery tickets, so much so that the whole enterprise is sometimes referred to as a “tax on the poor.”

One explanation for this is that poor people engage in riskier behavior, which is why they are poor in the first place. By Payne’s account, this way of thinking gets things backward. He cites a study on gambling performed by Canadian psychologists. After asking participants a series of probing questions about their finances, the researchers asked them to rank themselves along something called the Normative Discretionary Income Index. In fact, the scale was fictitious and the scores were manipulated. It didn’t matter what their finances actually looked like: some of the participants were led to believe that they had more discretionary income than their peers and some were led to believe the opposite. Finally, participants were given twenty dollars and the choice to either pocket it or gamble it on a computer card game. Those who believed they ranked low on the scale were much more likely to risk the money on the card game. Or, as Payne puts it, “feeling poor made people more willing to roll the dice.”

In another study, this one conducted by Payne and some colleagues, participants were divided into two groups and asked to make a series of bets. For each bet, they were offered a low-risk / low-reward option (say, a hundred-percent chance of winning fifteen cents) and a high-risk / high-reward option (a ten-percent chance of winning a dollar-fifty). Before the exercise began, the two groups were told different stories (once again, fictitious) about how previous participants had fared. The first group was informed that the spread in winnings between the most and the least successful players was only a few cents, the second that the gap was a lot wider. Those in the second group went on to place much chancier bets than those in the first. The experiment, Payne contends, “provided the first evidence that inequality itself can cause risky behavior.”

People’s attitude toward race, too, he argues, is linked to the experience of deprivation .° Here Payne cites work done by psychologists at N.Y.U., who offered subjects ten dollars with which to play an online game. Some of the subjects were told that, had they been more fortunate, they would have received a hundred dollars. The subjects, all white, were then shown pairs of faces and asked which looked “most black.” All the images were composites that had been manipulated in various ways. Subjects in the “unfortunate” group, on average, chose images that were darker than those the control group picked. “Feeling disadvantaged magnified their perception of racial differences,” Payne writes.

deprivation:

Lack or loss.

“The Broken Ladder” is full of studies like this. Some are more convincing than others, and, not infrequently, Payne’s inferences seem to run ahead of the data. But the wealth of evidence that he amasses is compelling. People who are made to feel deprived see themselves as less competent. They are more susceptible to conspiracy ° theories. And they are more likely to have medical problems. A study of British civil servants showed that where people ranked themselves in terms of status was a better predictor of their health than their education level or their actual income was.

conspiracy:

A secret plot to do something wrong.

All of which leads Payne to worry about where we’re headed. In terms of per-capita income, the U.S. ranks near the top among nations. But, thanks to the growing gap between the one per cent and everyone else, the subjective effect is of widespread impoverishment. “Inequality so mimics poverty in our minds that the United States of America … has a lot of features that better resemble a developing nation than a superpower,” he writes.

Questions to Start You Thinking

Considering Meaning: How do you explain the statement “In a society where economic gains are concentrated at the top — a society, in other words, like our own — there are no real winners and a multitude of losers” (paragraph 8)? How does Kolbert’s research support this statement?

Identifying Writing Strategies: How is Kolbert’s introduction different from the rest of the essay? Why do you think Kolbert begins the essay this way?

Reading Critically: Why do poor people engage in risky behaviors such as gambling? Why might you expect the opposite to be true?

Expanding Vocabulary: Define inequity (paragraph 3); incentive (paragraph 8); disproportionate (paragraph 12); inferences (paragraph 16); subjective (paragraph 17); and quintile (paragraph 11). What do these words reflect about the subject matter or indicate about the writer of this article?

Making Connections with the Paired Essay: Explain how an experiment or argument made by Keith Payne that’s mentioned in Kolbert’s essay is similar to the one in the excerpt from “The Broken Ladder”. What are the commonalities that characterize all of Payne’s work as you see it here?

Suggestions for Writing

Consider the quote by Keith Payne that Elizabeth Kolbert uses in her conclusion: “Inequality so mimics poverty in our minds that the United States of America has a lot of features that better resemble a developing nation than a superpower” (paragraph 17). Write a persuasive essay arguing whether that statement is true or false, and why. Use both the Kolbert essay and outside research to back up your position.

Go to the salary database Kolbert mentions in paragraph 2 and explore it. Look up some salaries: https://www.sacbee.com/site-services/databases/state-pay/article2642161.html. Do you think this database is a good idea? Is it ethical? Is it a violation of privacy, or should everyone know everyone else’s salary? What problems does it create, beyond the ones mentioned by Kolbert? Whether you think it’s a good or bad idea to have a public database like this one, defend your opinion persuasively.[supanova_question]